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Cedar Rapids, Waterloo Mail Centers Could be on USPS Chopping Block

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CEDAR RAPIDS, Iowa The United States Postal Service will initiate area mail processing feasibility studies at Cedar Rapids and Waterloo that could lead to consolidating those operations in Davenport and Des Moines, respectively.

The studies, which are being announced this morning by Postmaster General Patrick Donahoe, involve the review of mail processing and transportation operations at those facilities. The mail volume will be reviewed to determine the capacity needs to increase efficiency and improve productivity, according to Cliff Guffey, president of the American Postal Workers Union.

"In doing so, we will be able to continue to provide universal service at a reasonable cost for a long time to come," Guffey said.

If the USPS consolidates the Cedar Rapids facility with it processing and distribution center in Davenport as many as 200 jobs could be affected, according to members of the American Letter Carriers Union local in Cedar Rapids.

"We are forced to face a new reality today," Donahoe said in announcing his proposal in Washington this morning. "First-Class Mail supports the organization and drives network requirements. With the dramatic decline in mail volume and the resulting excess capacity, maintaining a vast national infrastructure is no longer realistic. Since 2006, we have closed 186 facilities, removed more than 1,500 pieces of mail processing equipment, decreased employee complement by more than 110,000 through attrition and reduced costs by $12 billion."

There is a new reality for the postal system, Sen. Tom Harkin said, but the bigger question is whether the nation value its mail delivery system.

"If they are going to be consolidating the processing centers, fine," the Iowa Democrat said. "I just want to make sure that what they come up with is cost savings. Sometimes people shuffle things around and it doesn't really save any money at all."

The next question, Harkin said, is whether the postal system is a service or not.

"If it is a service, then we have to be willing to understand that sometimes services don't always break even. They don't make money," Harkin said. "This is not FedEx. This is not UPS. It is a postal service and in many ways is doing things that a private entity would never do because there is no money in it."

U.S. Rep. Bruce Braley expressed concern about the possible consolidation and has asked USPS for an analysis of job loss. He's asked that a decision on consolidation be delayed until Iowans have an opportunity to weigh in.

"This action by the U.S. Postal Service could mean hundreds of Iowans will soon be unemployed," Braley said. "Now is not the time to lay off Iowa workers. I will fight this bad decision."

USPS's operating expenses are funded by the sale of its goods and services, not by tax dollars. It repeatedly has warned of a financial crisis. From 2007 to 2010, mail volume nationally has fallen 20 percent while postage remained at the rate of inflation, according to Donahoe. The operating loss last year was $8.5 million.

Donahoe has indicated he will ask Congress, among other things, to be allowed to pull more than half of a million employees from the health and retirement plans and bust union contracts.

A financial rescue plan is said to be part of President Obama's broader $1.5 trillion deficit reduction package, according to the Washington Post.

In advance of those recommendations, the Obama administration is asking lawmakers to give the Postal Service a 90-day extension to pay billions of dollars in mandatory annual retirement payments that are due at the end of its fiscal year Sept. 30.

If approved, a delay would buy time for Congress, the White House and postal officials to draft a package of reforms for the cash-strapped delivery service, which Donahoe has warned is teetering on the brink of financial collapse and likely to go broke by fall 2012.

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